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Podiatry Insurance Company of America a Mutual Company - Medical Malpractice Rate Filing

Monday, August 20, 2007

Reference:

PCAG-125264571

EXPLANATORY MEMORANDUM Podiatry Insurance Company of America, a Mutual Company OUM Chiropractor Program Medical Professionals Program, a Purchasing Group Amendatory Rule Filing – State of District of Columbia With this filing we are submitting for your approval revisions to rating rules used with and previously approved for the OUM Chiropractor Program. A detailed description of each revision and/or new submission appears below. The requested effective date for these changes is January 1, 2008. Rating Manual The following changes were made to the Rating Manual: 1. Partnership, Corporation or Professional Association Shared limits for a partnership, corporation or professional association continue to be available at no additional cost. The cost for purchase of a separate limit of liability is being increased from 5% to 10% of total premium (Items I.A.2 and II.B.2). The maximum charge remains 100%. 2. Leave of Absence We are revising the Leave of Absence rule to reflect a premium discount of 75% as opposed to interrupting the policy premium completely. We feel that this change recognizes the fact that exposure under a claims-made policy still exists during the leave of absence period because the coverage is suspended only for “any claim or claims for injury arising out of direct patient treatment rendered during the period of the policy interruption.” Claims may still be reported during the leave of absence period. Without this endorsement, the insured’s option would be to cancel the policy altogether, purchase tail coverage, and then reapply for coverage upon his or her return to practice. The maximum period of time for a Leave of Absence will be twelve months. The Leave of Absence rule is being moved from the Coverage Change Request section (previously item I.E.3) to the Premium Discounts section (now I.D.8), resulting in re-numbering of other items in those sections. Schedule Rating is now I.D.9; Locum Tenens Coverage is now I.E.3. 3. Policy Cancellation We are removing the language regarding consecutive non-payment of premium (Deleted: “A policyholder will be permitted two consecutive non-payment of premium cancellation notices. If it becomes necessary for a third consecutive cancellation notice, the cancellation notice will indicate the policy is being canceled for "Underwriting Reasons" and the coverage will not be reinstated.”) This language could be construed so as to imply that a policy may cancel twice for non-payment of premium, and that reinstatement is automatic and guaranteed as long as payment is subsequently made. When a policy has been canceled for non-payment of premium, reinstatement will always be subject to a satisfactory underwriting review. 4. District of Columbia Rating Manual Supplement Ed. 1-08 The change to our Policy Cancellation rule in Item 3 above was also made to our District of Columbia Rating Manual Supplement. A revised 1-08 edition is being filed for approval.